6. Deriving the short-run supply curveThe following graph plots the marginal cost (MC) curve, average total cost (ATC) curve, and average variable cost (AVC) curve for a firm operating inthe competitive market for sun lamps.COSTS (Dollars)8056240D88123648600Price(Dollars per lamp)16O0ATCAVCFor every price level given in the following table, use the graph to determine the profit-maximizing quantity of lamps for the firm. Further, selectwhether the firm will choose to produce, shut down, or be indifferent between the two in the short run. (Assume that when price exactly equalsaverage variable cost, the firm is indifferent between producing zero lamps and the profit-maximizing quantity of lamps.) Lastly, determine whetherthe firm will earn a profit, incur a loss, or break even at each price.040 45 56QUANTITY (Thousands of lamps)Quantity(Lamps)Produce or Shut Down?Profit or Loss?On the following graph, use the orange points (square symbol) to plot points along the portion of the firm's short-run supply curve that correspondsto prices where there is positive output. (Note: For the graphing tool to grade correctly, you must plot the points in order from left to right, startingwith the point closest to the origin. You are given more points to plot than you need.) On the following graph, use the orange points (square symbol) to plot points along the portion of the firm's short-run supply curve that correspondsto prices where there is positive output. (Note: For the graphing tool to grade correctly, you must plot the points in order from left to right, startingwith the point closest to the origin. You are given more points to plot than you need.)ⒸPRICE (Dolars per lamp)8064PRICE (Dolars per lamp)5645N241608 C121D18Suppose there are 9 firms in this industry, each of which has the cost curves previously shown.88On the following graph, use the orange points (square symbol) to plot points along the portion of the industry's short-run supply curve thatcorresponds to prices where there is positive output. (Note: For the graphing tool to grade correctly, you must plot these points in order from left toright, starting with the point closest to the origin. You are given more points to plot than you need.) Next, place the black point (plus symbol) on thegraph to indicate the short-run equilibrium price and quantity in this market.Note: Dashed drop lines will automatically extend to both axes.D1632 4056QUANTITY (Thousands of lamps)45DemandFirm's Short-Run Supply144 218 288 380 432 504 578 848QUANTITY (Thousands of lamps)At the current short-run market price, firms will-0-Industry's Short-Run SupplyEquilibriumin the short run. In the long run,

Question

Accepted Answer

Shut down point for a firm is where the price level offered to producer is lesser than the average…

6. Deriving the short-run supply curve The following graph plots the marginal cost (MC) curve, average total cost (ATC) curve, and average variable cost (AVC) curve for a firm operating in the competitive market for sun lamps. COSTS (Dollar) 54 ATC ?